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No plain sailing ahead for Vodafone, says Barclays

It comes on the week the group posted full year results, in which it sounded an upbeat note on prospects
No plain sailing ahead for Vodafone,  says Barclays
Vodafone faces headwinds, reckons Barclays

Rising competition ahead has led scribes at Barclays to downgrade Vodafone plc (LON:VOD)  to 'equal weight' from 'overweight'.

It comes on the week the group posted full year results, in which it sounded an upbeat note on prospects, despite posting  a £5.2bn annual loss due to a writedown of its Indian operations, while revenue fell 4.4% to €47.6bn, in part due to foreign exchange headwinds and regulatory headwinds in Europe.

Vodafone said it saw organic adjusted core earnings growth of between 4% and 8% in fiscal year 2018, boosted by stabilising average revenue from its contract customers and lower spending.

Free cash flow (FCF) is expected to reach €5bn from €4.1bn in fiscal year 2017 and €1.2bn the year before.

Barclays notes that the group's valuation looks 'broadly up with events', but that FCF growth beyond 2018 will likely be tempered by rising competitive intensity.

Vodafone shares nudged 0.27% higher at 220.75p.

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